AIG 2011 Annual Report Download - page 176

commercial letters of credit supporting insurance credit exposures were $18 billion of the total exposure, or
17 percent, to global financial institutions.
• The remaining credit exposures to this sector were primarily related to reinsurance recoverables, ordinary
shares of AIA, collateral extended to counterparties mostly pursuant to derivative transactions, derivatives,
and the fronting of risk management policies to captive insurers of these financial institutions.
Of the $108 billion aggregate financial exposure, $35.8 billion was to United Kingdom and European-based
financial institutions.
• $12.2 billion of this aggregate credit exposure was to non-bank institutions, of which $9.5 billion, or
78 percent, was reinsurance recoverable balances. Reinsurance recoverables were primarily to highly rated
reinsurers based in Switzerland, Germany, and the United Kingdom. $1.7 billion of the aggregate credit
exposure to non-banks was fixed maturity securities. Approximately 98 percent of the non-bank exposures
were considered investment grade based on AIG’s internal ratings.
• Aggregate credit exposures to United Kingdom- and European-based banks totaled $23.5 billion, of which
$22.7 billion were considered investment grade based on AIG’s internal ratings. Aggregate below investment
grade-rated credit exposures to European banks were $793 million.
• AIG’s credit exposures to banks domiciled in the Euro-zone countries totaled $9.6 billion, of which
$5.1 billion were fixed maturity securities. Credit exposures to banks based in the five countries of the
Euro-zone periphery (Spain, Italy, Ireland, Greece, and Portugal) totaled $1.7 billion, of which $1.0 billion
were fixed maturity securities. Credit exposures to banks based in France totaled $1.9 billion, of which
$845 million were fixed maturity securities. AIG’s credit exposures were predominantly to the largest banks
in these countries.
The following table presents AIG’s aggregate credit exposures to banks in the United Kingdom and Europe:
December 31, 2011 Fixed Cash and
Maturity Short-Term
(in millions) Securities(a) Investments(b) Derivatives(c) Other(d) Total
Euro-zone countries:
Netherlands $ 2,157 $ 192 $ - $ 962 $ 3,311
Germany 765 607 93 669 2,134
France 845 382 226 442 1,895
Spain 582 71 78 122 853
Italy 253 1 84 233 571
Belgium 171 1 3 146 321
Ireland 138 92 - 40 270
Greece - 1 - - 1
Portugal - - - - -
Other Euro-zone 194 92 - 4 290
Total Euro-zone $ 5,105 $ 1,439 $ 484 $ 2,618 $ 9,646
Remainder of Europe
United Kingdom $ 4,282 $ 2,242 $ 632 $ 1,549 $ 8,705
Sweden 760 1,322 - 46 2,128
Switzerland 1,027 630 14 355 2,026
Other remainder of Europe 429 563 - 42 1,034
Total remainder of Europe $ 6,498 $ 4,757 $ 646 $ 1,992 $ 13,893
Total $ 11,603 $ 6,196 $ 1,130 $ 4,610 $ 23,539
(a) Fixed maturity securities primarily includes available-for-sale and trading securities reported at fair value of $10.6 billion ($10.6 billion
amortized cost), and $1 billion ($1.1 billion amortized cost) respectively. Covered bonds (debt securities secured by a pool of financial assets
sufficient to cover any bondholder claims and which have full recourse to the issuing bank) represented approximately 10 percent of the
$11.6 billion fixed maturity securities.
162 AIG 2011 Form 10-K